Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Generator price rises reflect market power

Generator price rises reflect market power

Genesis Power’s announcement that it intends to raise average retail prices to some of its customers by nine percent should be viewed with extreme concern by all consumers the chairman of the Major Electricity Users Group (MEUG), Mr Terrence Currie, said today.

“The withdrawal from the market of the largest electricity retailer, On Energy, at the beginning of winter means the level of competition in the domestic electricity market has dramatically changed,” he said.

“The beneficiaries of On Energy’s departure are the remaining generating retailers such as Genesis Power, Mighty River Power, Contact Energy and Meridian Energy. These companies can increase their consumer prices knowing the intense pre-crisis competition has now essentially vanished.

“Raising prices after having eliminated your largest competitor is a textbook anti-competitive practice that every jurisdiction in the Western world deems illegal, Mr Currie said.

He said the investigation by the Commerce Commission into the practices and behaviour of the dominant generators in New Zealand over this winter would be the first real test of whether the recent changes to the Commerce Act are effective.

“The generators may claim that this is how markets work; that any ‘weak’ electricity retailer will be forced from the marketplace. The reality is that end consumers now have less choice between retailers and in some areas no choice at all. Many domestic and small business consumers will end up paying substantially more for power than they did before the winter crisis occurred.

“Consumers are now basically at the mercy of the remaining generators and Genesis has indicated that it will waste no time in taking advantage of that opportunity.” Mr Currie said the Review by the Minister of Energy into events over winter 2001 needs to be mindful that investors in energy intensive industries must have confidence that the competition laws of New Zealand will be vigorously applied. They must also be confident that producers for all input factors, such as electricity generation, are not allowed to exercise unbridled market dominance.

“Both large and small consumers want and deserve effective competition at all stages of the electricity supply and delivery chain. The electricity structure has failed to deliver that outcome and Government now needs to consider all options,” Mr Currie said.

…ends/

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Government: RSI ‘State Of The Nation’ Report Published
latest research, science and innovation system report card is now available, and outlines how the system is performing, Research, Science and Innovation Minister Megan Woods has announced. “The report seeks to increase transparency, act as a reliable data source and stimulate discussion... More>>




Fonterra: Increases 2021/22 Forecast Farmgate Milk Price

Fonterra Co-operative Group Limited today increased and narrowed its forecast Farmgate Milk Price range to NZD $7.90 - $8.90 per kgMS, from NZD $7.25 - $8.75 per kgMS. The midpoint of the range, which farmers are paid off, has increased to NZD $8.40 per kgMS, from NZD $8.00 per kgMS... More>>

Stats: Auckland’s Population Falls For The First Time
In the wake of the COVID-19 pandemic, New Zealand’s population growth slowed down with Auckland recording a population decline for the first time ever, Stats NZ said today. “New Zealand saw slowing population growth in all regions... More>>



Pamu & Westpac: Market-leading Sustainability-Linked Loan

Westpac NZ and Pāmu have signed New Zealand’s most comprehensive Sustainability-Linked Loan to date, also the largest in the agricultural sector, and the first involving a state-owned enterprise. Pāmu, also known as Landcorp, is New Zealand’s biggest farming business. It will borrow $85m from Westpac NZ over three years... More>>


Retail NZ: Some Good News In COVID Announcements, But Firm Dates Needed

Retail NZ is welcoming news that the Government is increasing financial support for businesses in light of the ongoing COVID-19 lockdown, and that retail will be able to open at all stages of the new “Covid Protection Framework... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>